Chinese Technology Giant Ready To Float

Industry News By Rhys Little, 8th May 2014

The biggest privately owned business in China has just filed papers in New York for an Initial Public Offering (IPO) The Chinese internet and technology giant Alibaba Group Ltd is already the biggest e-commerce business in the world, and is about to go even larger by wanting to raise $1 billion in its initial float.

The Company is a Chinese version mixture of our Amazon, EBay, and PayPal. There’s Tmall, an online shopping mall; Taobao, a marketplace where small Chinese companies sell directly to consumers; and Alipay, a digital payments company that Chinese consumers use through their mobile phones for all sorts of transactions, on Alibaba sites or off.

This process will easily make it the largest Chinese firm ever, to list in New York and will certainly make the rest of the world take note of the booming Chinese internet industry. It was formed in 1999 by Jack Ma, a Chinese internet entrepreneur, Alibaba started by selling just a few items and now has a listed revenue of $5.66 billion with a net income $2.85 billion for the last nine months of 2013. According to the documents filed, the amount of merchandise they sold last year was a whopping $248 billion, with more than 11.3 billion orders in their order book.

Analysts are reeling from the shock, and expect the company to easily raise $15-$20 billion, which will make it the biggest American IPO since the massive Facebook float in May 2012 at $16 billon.

Alibaba is keeping a close secret whether it will be making the offering in the New York Stock Exchange or the Japanese Nasdaq, but you can expect it to explode into the world market with an initial share price that will value it way above that of Facebook, Amazon and eBay.